This week’s question brings up a subject many of us are running into lately – what exactly does a career coach DO, and when should we be paying them? What say you, RBC? Does “Confused” have a valid concern or have things changed that much in our industry as of late? Anyone who’s worked successfully with these outplacement / career coaches please share your stories!

Dear Sticky Stuff,

I’m so confused. I’m a corporate recruiter and I enjoy going to networking events to mingle with other HR professionals. I have always felt like recruiters need to stick together and help each other out when we can. I was so excited when I met a recruiter who he had gone into outplacement and career consulting and seemed pretty well connected in healthcare (my industry) so we talked about some of my hard to fill positions. He gave me the impression that he was no longer doing direct recruiting so I was excited at the possibility that I might be able to offer him some help with placing his clients and fill some of my positions. A win-win for both of us.

I was shocked when I checked my email and found a fee agreement from him! It was about 3 pages long and full of all kinds of jargon. I wasn’t looking for a new vendor; I work for a very large company that does not use agencies for any outside openings. I even told him this when we met! I just asked if he could share my openings with some of his contacts - I didn’t ask him to do a search for me! Is it just me? I feel rather silly to think that someone might just want to do something nice for a fellow recruiter and maybe help out a candidate they were being paid to assist. I do this for other recruiters all the time if I get candidates I can’t hire – am I getting ripped off?

Signed, Confused

Amy Says:

Your question is so timely for me… I just had a bit of a misunderstanding myself around a similar issue! Frankly, I’m more like you, Confused. I “pay it forward” all the time and most of my contacts do the same. You don’t say what this person’s role is – independent outplacement service or work for an agency? If it’s an outplacement firm then it’s probably one I would stay away from in the future. Independent - well, lesson learned but my advice is cut your losses. There are still lots of great colleagues out there who value sharing a name or two in the spirit of solidarity. I would never expect anyone to work for free but to try to squeeze a fee out of every minute of “work” performed strikes me as the first step in building a bad reputation.

Sandra Says:

Dear Confused,

You are not confused. You met one of these double dippers. They tout themselves as outplacement and career consultants until they find out somebody has open positions then they want a piece of that action as well as being paid by the candidate or a company to do actual outplacement. The double dippers are usually recruiters who fell through the crack on the agency side and nobody on the corporate side wants them either so they become guru consultants. But, let’s be clear. There are many people who do outplacement and do it well. They are paid by companies. They do not charge a fee to recruiters because they are paid to help that person find another job without a fee getting in the way. In fact they market the people to recruiters at no fee to open as many doors as possible. There are good career consultants. They are paid by the individual to assist that person with all facets of his/her job search. If they are ethical and good at what they do, they maintain a contact list of recruiters that they provide to the person as part of their service or they recommend recruiters and companies for the person to contact. They do not ask for fees from recruiters or submit the person’s resume to a company for a fee, they are paid by the individual. If I pay my plumber to fix the plumbing then ask him to recommend an electrician he would not ask me to pay him for the name of an electrician or want me to pay him a % of what I paid the electrician he referred to me. If he did I would find a new plumber… fast!

I am not sure exactly what kind of a slime ball you were unfortunate enough to come in contact with but it sounds to me like he should have a big “F” on his forehead that stands for flake. I have run across some of these characters who would charge their grandmother some sort of referral fee if she asked them for directions to the Medicare office. They will say they are outplacement consultants then when some recruiter offers to take a look at some of the people they are getting paid to counsel they see a possibility for another few bucks and here comes the “deal sheet”. They will also offer employees of a company a referral fee to give them names of co-workers or open jobs. Then they turn around and want you to fund their referral fee. Then they tell the employee that they got a referral fee and will split it with the employee. Please note the way to identify these birds is by their cup shaped claws and they have three open grasping claws on each arm. They also have a big line of BS full of the jargon you mention and will try and justify a train wreck if it will make them a buck.

No you are not getting ripped off but if you agreed to pay him a fee to hire any of the people or companies he is already charging somebody would be getting ripped off by our double dipper. I have done some pretty hefty outplacement contracts for plant closings and division sales that left a lot of people facing unemployment. When we do those the candidates are placed, if we can, at no fee to a new employer. The old employer has already paid us. We also send their resumes to other recruiters with a note that indicates we are not looking for a fee just help for the candidate.

My take. Send him his fee agreement back with a note that says, “Perhaps I misunderstood what you do, it has always been my understanding that outplacement consultants and career consultants are paid by companies and individuals who retain them.” “We do not pay fees to consultants who have already been paid once. “ “It was my hope that I might be able to give you a channel for some of the people you represent to enhance your success thus enabling you to attain more business from happy clients.” “In fact I am more than willing to refer candidates at no charge to other recruiters if my company is unable to offer them a position.” “My recruiting and outplacement contacts do the same”. “That is the kind of win-win I thought we had discussed.”

You aren’t getting ripped off because you are not trying to make a buck with everybody you talk to. You get paid to do your job so don’t fall over into the gray to black area of double dipping. I once asked a linkedin contact for a referral as she was not interested in the position I spoke with her about. She sent a form letter indicating that she had an excellent network of people and would be happy to refer some friends to me but expected to be paid for each name she sent me. I sent a note back that I certainly was open to paying for names sourcing but I would need a letter from her boss indicating that it was ok for her to work for me providing names and I would have to send her a 1099 for anything she was paid. I never received that letter from her boss but did make it a point to contact almost all her linkedin connections. I suppose double dipping is not illegal but the bird with cup shaped claws has a stinky cage in my opinion.

Replies to This Discussion

@Amy & Sandra - great anwers. When the large corporation I worked for closed their U.S. offices in 2009, part of most employees (over 6,200 people) severance package was ouplacement services. I only have very anecdotal evidence, but of approximately 75 people that I know of that used the service 0% actually found jobs through the service. A few at least were able to improve their resumes, so I guess that part was o.k. But I can't even imagine how much money the company spent on that, seems like it would have been better spent in some way.

Beside that, I think if the "career counselor", "career coach", whatever has already been paid AND is actually trying to help the candidates actually get jobs then they should definitely not get a second "fee". Trying to make money from both ends is unethical, and would mean that some part of the whole equation is plain dishonest.

Good point about outplacement spend. My suggestion to clients when we do a contract is that they give upper level employees the option of receiving the money spent per individual in lieu of being part of the outplacement group. Many times it is more transition support to support people during a major layoff or company closing.

Another point worth mentioning - instead of dropping a fortune on outplacement spend companies can also look to their local workforce development council (in WA State it's under the Employment Security Department) for free. Washington does a "rapid response" program to go in and help people being laid off from major companies with career counseling, classes, tuition assistance to upgrade skills... all funded by the taxpayer already so companies should take advantage of it.

Good info Amy. One that we did was a plant closing in an area town. We were contracted for three months . The company contracted with the workforce development council and Texas workforce after we completed our contract. Workforce council came back to me and offered a consulting fiee for a one day a week continued contract. The workforce opened a small office in the town. Put in computers and put a staff person in the office so people who had not found a job would have a place to go with computers available, telephones and a full time person to assist them with online searches , applications and an office to do phone interviews away from their homes with no kids or barking dogs to distract. As specific interviews were set, i spent a day working with indivuduals to get them ready for either face to face or phone interviews with a specific company and discussed the interviews they had been on the previous week..

My office in Amarillo was also made available for interviews and a place for coffee and a few kind words before and after interviews when people had to come into Amarillo to interview here. This was a particularly difficult situation because the plant was located in a town of 25,000 people with not many opportunites to find another job locally. Most of the workforce had lived there all their lives and had worked at the plant since they were in high school with most being late 40's to early 60's.. We contacted every manufacturing plant that was within commute distance took a portfolio of resumes and made a presentation to the HR or management groups to generate interest in the people we represented before they went in for interviews. Our group felt that they had someone opening the door for them so it worked well. Most who were not able to take early retirement found new jobs..